Good day, and welcome to the Cognizant Annual Meeting of Shareholders. I'd now like to turn the conference over to Matt Friedrich, Executive Vice President and General Counsel. Please go ahead.
Thank you, operator. Good morning, everyone, and welcome to the 2020 Annual Meeting of Shareholders of Cognizant Technology Solutions Corporation. Again, my name is Matt Friedrich, and I will be acting as secretary of today's meeting. Joining me today is Brian Humphries, our CEO. Mr.
Humphries, who is also Director of the company, will be the Chairman of the meeting. Before I turn the meeting over to Brian, I would like to note that some of the comments made on today's call and some of the responses to your questions may contain forward looking statements. These statements are subject to the risks and uncertainties described in the company's earnings releases and filings with the SEC. Additionally, in response to your questions, we may reference certain non GAAP financial measures that we believe provide useful information for our investors. Reconciliations of non GAAP financial measures, where appropriate, to the corresponding GAAP measures can be found in the company's earnings release and other of our filings with the SEC.
Brian, over to you. Brian, I'm sorry, we can't hear you. Just a moment everyone, we're having a technical issue. We'll get Brian on in a moment.
Hello, can you hear me now? Okay. My apologies, everybody. Thank you, Matt, and good morning. Will the meeting now please come to order?
At this time, I would like to introduce you to certain other officers and directors of the company. Let me first introduce the directors of the company who are standing for reelection, all of whom are participating in the meeting via teleconference. They are Chairman of the Board, Michael Pazolas Fox Zane Abdallah Benita Bali Maureen Braekiron Evans Archana Deskes John Denine, John Fox, Jr, Leo McKay, Jr, Joseph Veli and Sandra Winberg. In addition to Matt, we are also joined today by Karen McLaughlin, our Chief Financial Officer. Before we begin today's official business, I'd like to take a moment to reflect on my 1st year as Cognizant's CEO.
In 2019, we grew revenue 5.2 percent in constant currency to $16,800,000,000 and returned approximately $2,600,000,000 to shareholders through share repurchases and dividend payments as part of the capital return program. We've come through a highly productive year during which the company initiated a transformation agenda that will position us once again to be an industry bellwether. Over the past 12 months, I've been able to significantly deepen my understanding of Cognizant's business, the clients we serve, our sizable market opportunity, the industry we compete in and our incredibly talented associates throughout the world. I'm convinced Cognizant has a big role to play in increasing the competitiveness of our clients and transforming the IT services industry. This morning, I'd like to talk to you about 2 initiatives that are shaping our future.
1st, our progress in repositioning Cognizant to achieve its full growth potential and second, our plan for emerging from the COVID-nineteen pandemic and the humanitarian and economic crisis it's created, stronger and more competitive than ever. Let me start with how we're pivoting the company to drive top line momentum. In May of last year, we established a transformation office to think through and commit to the best path forward for our future. Since then, we've been executing the recommendations of the Transformation Office to optimize our strategy, client centricity, commercial posture, delivery and costs. Last year, we sharpened the company's strategic posture to align directly with the capabilities clients to speed their digital journeys.
Our strategy is to protect and optimize our traditional business whilst winning in the digital battlegrounds of AI and analytics, digital engineering, cloud and the Internet of Things. We will increasingly lead with technology consulting as part of our overall evolution to more managed outcome based client engagements. Our industry expertise will remain a core value proposition. We also aim to significantly increase the scale of our international business, which has significant growth potential. Our strategy has become even more timely and relevant as the COVID-nineteen pandemic compels clients in every industry to accelerate their shift to operating with digital business models.
The world is becoming more mobile, virtual and hyper personalized, which means client needs to modernize their businesses, innovate faster, become more agile and rethink their core processes for the new normal. We expect major IT trends like core modernization, data modernization and cloud adoption to accelerate, playing directly to our strategy and ensuring we compete in faster growing categories. To build on the company's growth oriented heritage, we brought in a number of new executive leaders. Their drive, energy and fresh perspectives are reinvigorating our client centricity and competitiveness. To advance our execution, we've also emphasized the back to basics approach that includes delivering value to clients every day, running our businesses with operational rigor and streamlining processes to empower associates and avoid bureaucracy.
As always, in all of our actions, we fuse high performance with high integrity. Our strategy also shapes how we allocate capital, develop client relationships and industry partnerships, structure the organization and upskill our associates. Partnerships. Winning in digital requires an ecosystem of strategic partners and Auras are among the most trusted names in technology. As cloud computing changes the way IT is delivered across infrastructure, applications and platforms, we build close relationships with leading hyperscale companies and SaaS vendors.
In 2020, we've announced 4 acquisitions that extend our cloud capabilities and sharpen our alignment with 2 of the most valued strategic partners, Salesforce and Workday. Research from Gartner acknowledged our tremendous momentum in cloud by naming Cognizant the leader in its 2020 Magic Quadrant for public cloud infrastructure, professional and managed services worldwide. To ensure our associates have the right digital skills, we have meaningfully increased our investment in Cognizant Academy, our in house training organization. That way, we can deploy more of our talented professionals in support of our digital imperatives. During the Q1 of the year, despite the double hit of COVID-nineteen pandemic and Amaze ransomware attack, which we contained nearly a month ago, our associates rose to the considerable challenges of delivering high value work to our clients.
Their dedication to clients coupled with our sustained focus on executing our strategy are paying dividends. This is evidenced by our solid Q1 results, which included total contract awarded growth of more than 30% year over year with broad based strength across all service lines, industries and geographies. This was our strongest quarterly signings since 2017. In addition, digital revenue now accounts for 41% of total revenue and grew 19% year over year in the Q1. In short, our increased commercial momentum confirms that our strategy, dilution portfolio and renewed vigor are resonating well with clients.
Turning to our second topic, ensuring we emerge from the crisis stronger. Within the IT services industry, COVID-nineteen is having a profound effect on both the fulfillment and demand side of the business. Regarding fulfillment, we have shifted rapidly to a work from home capability across our delivery centers. With the ransomware attack contained, we are largely through any residual fulfillment issues and are substantially work from home enabled. On the demand side, the impact of COVID-nineteen has several dimensions.
We expect economic and human impact to be felt by companies across industries and across the globe throughout 2020. Since nobody can predict how long the macro environment will persist, We face uncertainty on many levels, including our cost structure, which we build to support demand and revenue assumptions that no longer hold through. Our responses to design offerings that will help clients thrive in the post pandemic world. We have many of these offerings ready to go, such as virtual workplace, data modernization and cloud acceleration. We are investing in the business by further developing our digital skills, continuing to build on our commercial momentum, making Cognizant even more global and further derisking our business by developing a more robust and resilient global delivery model and by further hardening and strengthening our security environment.
In addition, we are adjusting our employee pyramid by onboarding approximately 20,000 entry level hires. Meanwhile, we aim to significantly decrease other costs, including corporate overhead, travel, marketing, relocations and non commercial lateral hires. Although public health and economic forces have significantly altered our outlook for 20 20, we remain confident in the growth prospects of the IT services industry and in our company's ability to weather this storm. Other reasons center on our mix of industries, geographies and customer segments. Our modern solutions portfolio, growing competitiveness, our strong balance sheet and above all the tireless dedication of our associates to their clients.
While Cognizant is a B2B company, our collective efforts touch not only our clients, we need this now more than ever, but also the billions of people they serve. This year, we plan to intensify our focus on diversity and inclusion as well as our social responsibility and sense of interdependence within the broader world. We resolved to drive greater diversity and inclusion throughout Cognizant. Our starting point is to ensure that our culture welcomes, recognizes, includes and values all people. We are committed to fostering a sustainable future for our company and the communities we serve.
We just hired our company's 1st Chief Sustainability Officer
who will
be joining us in July. In closing, I've grown to love this great company, and I feel privileged to be working alongside more than 290,000 dedicated associates. There's so much untapped potential across our company that I'm positive we can offer a game. We are passionately focused on returning Cognizant to being the IT services industry bellwether. And I'm thrilled to be serving as Cognizant's CEO and deeply appreciate the Board's total dedication to Cognizant's success.
Thank you for the opportunity to earn your confidence and trust.
All right. Thank you, Brian. We will now conduct the business portion of our meeting followed by a question and answer session. During the question and answer session, we will answer questions submitted during the meeting as time permits. The time is now 9:45 and the polls are now open for voting on all matters.
I will now discuss some of the procedural matters in connection with this meeting. The rules of conduct for the meeting have been posted to the virtual meeting website. We ask that you kindly abide by these guidelines so that we can have an orderly meeting. Today's meeting is being held pursuant to a notice included in the Cognizant proxy statement and sent to Cognizant shareholders on April 22, 2020. The proof of mailing of this notice will be filed with the minutes of the meeting.
The company has designated Tom Teague on behalf of Broadridge Financial Solutions to serve as the Inspector of Election. The Inspector of Election has previously advised that a majority of the total outstanding shares are represented here today. The report of the Inspector of Election regarding the presence of a quorum at the meeting and his oath of office will be filed with the minutes of today's meeting. As we have a quorum, we will proceed with the official business of the meeting. The Inspector of Election has a complete list of the holders of record of the outstanding shares of the company's Class A stock at the close of business on April 6, 2020, the record date for this meeting, which will also be filed with the records of the company and is available for inspection by any shareholder.
I will now outline the procedures for voting. Only Cognizant shareholders as of the record date for this annual meeting are entitled to vote. Shareholders who voted by proxy need not cast ballots in the voting today unless they wish to change their vote. If you have not yet submitted a proxy or you would like to change your vote and you are participating in the meeting via the virtual web portal, you may do so now by clicking the Vote Here button on your screen. Once all items of business have been addressed and shareholders have been provided an opportunity to submit their votes online, the Chairman will close the polls for voting.
The preliminary vote totals will be outlined at the end of this meeting, but the final vote totals will not be known until the Inspector of Election certifies the tabulation after the meeting. Those final results will be reported by the company in a current report on Form 8 ks filed with the Securities and Exchange Commission within 4 business days following today's meeting. The guidelines for this annual meeting available on the web portal provide rules for presenters, including that each presenter must limit the time of his or her presentation to 3 minutes and keep the substance of the presentation strictly limited to the shareholder proposal being addressed. I will now cover the matters to be considered by shareholders at this meeting. There are 4 such matters.
1st, the first voting item concerns the proposed election of the following 11 director nominees to serve until the 2021 Annual Meeting of Shareholders or until their respective successors have been duly elected and qualified. These directors are Zane Abdallah, Venita Bali, Maureen Brakeiron Evans, Archana Deskes, John Deneen, John Fox, Brian Humphries, Leo McKay, Michael Pitzelis Fox, Joseph Veli and Sandra Winberg. Additional information about each nominee and his or her professional qualifications is contained in your proxy materials. The second item is an advisory vote on the company's executive compensation in which shareholders are asked to approve a non binding advisory resolution appearing on Page 33 of the company's proxy statement. The 3rd item is a proposal to ratify the appointment of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2020.
Mila Petrova of PwC is with us today and is available to respond to any questions you may have during the question and answer session. The 4th item, if properly presented at this meeting, is a shareholder proposal requesting that the Board of Directors take action as necessary to permit shareholder action by written consent. At this time, I'd like to invite Mr. John Chvedden or his representative to present this proposal. Again, pursuant to our rules of conduct for the meeting, you have 3 minutes to present and the substance of your presentation should be strictly limited to the proposal.
I will now ask the operator to please open the line for the proponent.
Hello, this is John Chevedden. Can you hear me okay?
Yes, sir.
Proposal 4, right to act by written consent. Charles requests our Board of Directors take the steps shareholders at which all shareholders entitled to vote thereon were present and voting. 100 of major companies enable shareholder action by written consent. Taking action by written consent in place of a meeting is a means shows can use to raise important matters outside the normal annual meeting cycle like the election of a new director. The right for shareholders to act by written consent is gaining acceptance as a more important right than the right to call a special shareholder meeting.
The directors at Intel apparently thought they could divert shareholder attention away from written consent, but are making it less difficult for shareholders to call a special meeting. However, Intel shareholders responded with greater support for written consent in 2019 compared to 2018. This proposal topic won 46% support at the 2018 Cognizant meeting. This 46 percent support most likely represented at least 51% support from the shares that have access to independent proxy voting advice. After a 45% vote for written consent shareholder proposal, the Bank of New York Mellon said it adopted written consent in 2019.
This proposal is of additional importance because all Cognizant shareholders who own their shares for less than one continuous year cannot participate in calling for a special meeting. This could disqualify from 25% to 50% of Cognizant's shares. This is a proposal topic that can gain increased shareholder support even if management opposes it. For instance, Flowserve Corporation opposed this proposal topic and support increased from 43% to 51% in 1 year. There is also concern about Cognizant executive pay being rejected by 12% of shares in 2019.
The usual rate of rejection is 5% in a well performing company. John Klein, the 2019 Chairman of the Board and who is not on the ballot this year received the highest negative Director votes. Mr. Abbalda, who chaired the important nomination committee, received the 2nd highest negative director votes. And Cognizant's stock has gone downhill from $61 to $52 over the past 5 years.
Please vote yes, write that Act by Written Consent Proposal 4.
All right. Thank you, Mr. Chibetin. I would simply point out as noted in the company's proxy materials that the company's current practice with respect to shareholder action by written consent is consistent with market practice and that an overwhelming majority of S and P 500 Companies 70% either do not permit shareholders to act by written consent or require that any shareholder action by written consent be unanimous, which is effectively the same as not permitting action by written consent for a large public company. As such, most other large public companies in fact do not permit the kind of shareholder action by written consent requested by the proponent and the Board believes that the company's current practice is consistent with market practice.
That concludes all items on the agenda for shareholder action at the meeting. Any shareholder who has not yet voted or who wishes to change their vote should do so now by clicking the Vote Here button on the web portal and following the instructions provided. Shareholders who have sent in proxies or voted via the telephone or Internet and do not wish to change their votes do not need to take any further action. We will now pause for 1 minute to allow shareholders to submit their votes. All right.
The time is now 9:55 am and the polls are now closed. We have received a preliminary report of the results of voting from the Inspector of Election. The report of the Inspector of Election indicates that each of the directors slated for election and previously identified by me on this call have been duly elected as directors of the company to serve until the 2020 Annual Meeting of Shareholders. Next, the shareholders have approved on an advisory basis the company's executive compensation as disclosed in the company's proxy statement. The shareholders have ratified the appointment of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for fiscal 2020.
And last, the shareholders have rejected the shareholder proposal regarding written consent. As there is no further business, the business portion of the meeting is now adjourned. We will now begin the question and answer session. For those of you participating via the web portal, you can submit a question by typing a question in the Ask a Question field in your screen and clicking submit. Please note, we will answer as many questions as time permits in accordance with the rules of conduct of the meeting.
We ask that you limit your questions
to matters relevant to the business of the company. So then turning to the questions. Let's start with we have a question regarding when was the last in person board meeting? Michael, do you want to take that?
Yes. Thank you, Matt. The last in person Board meeting was February 24 to 26 this year. It was actually held in India as part of our regular Board meeting schedule, whereby we go to India on a periodic basis.
Very good. Thank you. Our next question is how many shareholders logged into today's meeting? And I would say that according to the service that we are using, we have 14 parties who have dialed in on the shareholder line. The next question we have is, what was the selection process for Director Archana Deschis?
Michael, would you like to take that?
Yes. Thank you, Matt. The Board and within that the non and gov committee develop a skilled matrix of the various skills, capabilities that we require on the Board and overlaid upon that considerations of geographic spread, diversity and the like. We employ external search firms that are skilled and have a track record of meeting such requirements. In the case of Ms.
Deskos, she represents many of the attributes we were looking for. I'll mention just 3. First of all, having been and currently being the CIO of Intel, she is well aware of major corporate needs of IT suppliers like ourselves. Number 2, she is an expert in many of the new technologies that the company is using. And number 3, she has expertise in cybersecurity, which is a critical board need.
Very good. Thank you. The next question we have is about campaign finance is about campaign finance disclosure reports. And the question is, are the campaign finance disclosure reports available? I will take that.
And the answer to that question is yes. On our website, you will find detailed information about the company's political expenditures and our philosophy regarding such expenditure. So yes, that is available on our website. The next question that we have is from the Carpenter Union Pension Funds. Welcome.
The question reads in part, as long term shareholders, we appreciate the efforts of the company to prioritize employee safety and health and business continuity during the COVID-nineteen pandemic. Financial liquidity is extremely important in today's turbulent market. The company repurchased 632,000,000 of shares in the Q1 and suspended further share repurchases. What factors will the Board or senior management consider in deciding when to restart share repurchasing activity? Thank you very much for the question.
Brian, would you like to take that?
Yes, of course. And hopefully people can hear me. Thank you for the questions. Not only did we repurchase $600,000,000 plus in the Q1, but actually in 2019, we also repurchased $2,200,000,000 worth of shares and we view both dividends and share repurchases to be a fundamental element of our capital allocation strategy. We review our capital allocation strategy on a quarterly basis with the Board of Directors.
Obviously, Karen as CFO and myself as CEO review it even more frequently. We suspended share repurchases in light of the COVID-nineteen backdrop and uncertainty that went with it. And we obviously wanted to prioritize liquidity at this moment in time, subject to greater visibility and greater confidence in the macro environment. We will reinitiate share repurchases at a future date. I will say that we are absolutely committed to offsetting any dilution from stock option grants, etcetera, And even the 630,000,000 shares repurchased to date will, in theory, have already achieved that for the year.
All right. Thank you. The last question we have is how many directors have attended the meeting today? And the answer to that is we have all directors present for the meeting today. Mr.
Chairman, Brian, that concludes our question and answer session.
Well, Matt, thank you, and thank you all to all of our shareholders for attending today's meeting. The conference is now concluded, and you may